It’s Cell Phone Mania As Street Sees Signs Of Recovery

By Eric Savitz

Shares of companies in the mobile phone sector are staging a furious rally today, with many companies up by 10% or more, on some hints from the industry that demand might be bottoming. Here are a few factors contributing to the more bullish tone:

Texas Instruments(TXN) last night narrowed its Q1 guidance range. The post-earnings conference call was hardly bullish, but TXN VP for investor relations Ron Slaymaker did say that the company’s wireless business is doing a little better than expected, and that “the handset number came up a little bit relative to our initial expectation.”

According to a research note from Raymond James analyst Todd Koffman, executives from RF Micro Devices (RFMD) speaking at the Raymond James conference in Orlando yesterday said that handset demand has strengthened in the current quarter, with February stronger than January, and January stronger than December. The company indicated that it expects rapid improvement in capacity utilization, which was at just 25% in early March.

Cowen analyst Matthew Hoffman in a research note this morning pointed pointed to three data point that may have led investors to conclude that the deterioration of the handset market has slowed. One of those was the comments from Texas Instruments. Another positive, he says, is a report that subscriber growth for handsets in India showed record growth in January, with 15 million net new subscribers. That is particularly good for Nokia(NOK), which he ntoes has 55% of the market for handsets there. Finally, he also notes that HTC reportedly is maintaining its Q1 guidance for flat shipments versus the fourth quarter, and that the company is suggesting March shipments will be up from February.

Bernstein Research analyst Pierre Ferragu today penned a bullish note on Nokia, asserting that the stock is priced for a “handset commoditization” scenario which he does not believe will play out. While he says the company has lost the “super high end” of the market for good to Research In Motion, Apple and others, Ferragu says that the company is improving its portfolio for the rest of the market. He thinks Q2 numbers will start to show improvement, mostly driven by “channel de-stocking.”

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There are 14 comments

MARCH 10, 2009 2:36 P.M.

the realist. wrote:

Mania is the perfect description. Today's buyers will have tax losses aplenty to show for their foolhardiness.

MARCH 10, 2009 2:38 P.M.

antie wrote:

For tech, its all about TI and TS...What is TS??

MARCH 10, 2009 2:45 P.M.

AK wrote:

Cell phones recovery helps analog chipmaker CAMD, which receives 70% of its revenues from companies like LG, Samsung, Motorola and Nokia. CAMD has stronger balance sheet (net cash/ market capitalization) than any of the names you mentioned.

MARCH 10, 2009 3:52 P.M.

ves wrote:

You missed QCOM

Real-Time: 35.22 Up 2.22 (6.73%)

MARCH 10, 2009 4:15 P.M.

whodunit wrote:

Must be the FXscript. :P

MARCH 10, 2009 4:21 P.M.

walid wrote:

Bernstein Research analyst Pierre Ferragu said that" Nokia has lost the “super high end” of the market for good to Research In Motion, Apple and others.."

What is this dude smoking???!!! did he has a hand on Nokia E71 and Nokia 5800 express (touch screen)....? let alone the Nokia E75 and the Nokia N97 (both will be available in May...) The E75 will blow away the Bold... and the N97 will blow away the Iphone! As Nokia said that the N97 when available in May, will be the by far the best phone in the market... I hope people stop hypping the Iphone and the Bold and get their facts straight! There are Phones and there are NOKIA phones!!!!

MARCH 10, 2009 4:42 P.M.

okee dokee walid wrote:

yes, nokia is going to crush apple and rimm. whatever i'm smoking is clearly not as good as what your smoking. you clearly got the potent stuff, my friend.

MARCH 10, 2009 5:25 P.M.

Parkite wrote:

Nokia is irrelevant in the US......unless you want a $50 phone for free w/a 2Y contract.

MARCH 10, 2009 6:28 P.M.

Chief Crazy Brain wrote:

I am glad to see that the depression is over.

MARCH 11, 2009 9:10 A.M.

WALID wrote:

ALREADY the phone Geeks had the Nokia 5800 express ahead of Iphone in all aspects except the Apps... (nokia Apps will be available in May)! I was wrong of comparing the N97 to the Iphone, in a way, because the N97 is a way way superior phone then the Iphone! talking Rimm now, I have the Nokia E71 and it is the best available business phone right now... Bold is a hypped business phone like the Iphone! Also, i was worng in comparing the E75 to the Bold in a way, because the E75 is a way way superior phone then the Bold crap! take it to the bank and do some reasearch before u post ur crap here! Nokia does not bring it best phones, for now, to the USA because carriers are bunch of theives.. they want to ripp the phone makers and the customers! but now they are bending over to NOkia because they know NOkia has the best products portfolio now! as u can see the unannounced deal between Nokia and verizon to bring a 4G phone exclusively to Verizon! CASE CLOSED!

MARCH 11, 2009 9:11 A.M.

WALID wrote:

I GAVE SOME OF THUS STUFF TO UR MOMA AND SHE LOVED IT!

MARCH 11, 2009 9:11 A.M.

WALID wrote:

THERE ATE PHONES AND THERE ARE NOKIA PHONES!

MARCH 11, 2009 9:14 A.M.

WALID wrote:

Parkite..
U can get the Crappy Storm at verizon for the 2 phones for the price of 1...lol! soon it will be "please buy the Storm and we will pay u money... guarantee!

MARCH 11, 2009 8:53 P.M.

sober wrote:

Wow, I have seen Nokia fan boys before but Walid takes the cake.
Nokia has not been successfull in the US because its phones did not appeal to customers here, up until a year ago the US was all about flip phones.
Saying the E71 is better than the Bold shows your warped view. As a phone I don't like the Bold, but for business phone (ie email) it still has way better security than the E71.
Nokia is losing market share in smart phones (see the latest numbers) and had better pray the N97 is better than the N96. The N95 was a good phone, but the N96 sucked. The N97 may have promise, but we will have to see how it compares to the next iPhone, next RIM, and Palm Pre. Like it or hate it, Nokia is endanger of becoming a mass market leader but smart phone follower.

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Tech Trader Daily is a blog on technology investing written by Barron’s veteran Tiernan Ray. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields. Comments and tips can be sent to: techtraderdaily@barrons.com.